CFA Practice Question

There are 520 practice questions for this study session.

CFA Practice Question

Which of the following statement(s) is (are) true with regard to deferred tax liability?

I. If the deferred tax liability is not expected to reverse, it should be treated as equity.
II. If the deferred tax liability is due to a temporary difference, it should be treated as debt.
Correct Answer: I and II

User Contributed Comments 3

User Comment
gth763s Temporary difference does not guarantee it will finally reverse.
o123 debt = liability ... so yes, you'd treat the DTL as its named; a liability.
krisscfa I. If the deferred tax liability is not expected to reverse, it should be treated as equity.
If the Equipment becomes obsolete...treated as neither Debt nor Equity....
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